Business Mentor/Consultant Terms...

I'm not sure if this is the right forum or not but we are a small business that knows its product but have little business knowledge.
One of us knows someone with undoubted financial acumen that is will to work with us over the next 2 years planning, making business plans, basically a Financial Director/CEO who will enable us to concentrate on the product.

He doesn't want payment but instead asks for 20% of equity up front. Seems to me that this sort of 'payment' for future services should be staggered over the term of the agreement.

There is no financial investment here at all.

Does anyone have any input? What is the norm?

Thanks

Re : Business Mentor/Consultant Terms

Hi,

I would strongly advise NOT to give away 20% of your business to anyone and certainly NOT a friend.

I have come acoss these people before when recruiting a BDM for my business. They are interested in what they can get from you.

I once interviewed a guy that should have been running for Prime Minister his CV was that good and he wanted a stake in my business, and said so at the interview. So I became over friendly at the interview and he said every company he was a director of, had gone bust. He had bad teeth and drove an old rover. Some director.

Offer him a three month paid contract, and review after that. Believe me, I already know you will not be offering him a stake in your business. Do not let him dictate what he wants, put it in black and white, plain as day what you are prepared to offer. If the 3 months is OK, make it a 12 month contract.

Before you do anything check him out, whats his form, wheres he worked, CRB check, references.

Be ruthless, if your not he could tie you up in knots and wreck your business.

Remember a friend is just that a friend, once they become part of YOUR business it a whole new game.

If you need business advice, please email graham.hughes7@btinternet.com and I will help where I can and for free.

Believe me over the laswt few years, I've seen it all, staff, legal, contracts, winning work, the sharks who are looking to have you over and take your money.


Regards

Graham